UK hotel revpar forecast to grow by 3% in 2010

A growth of 3% in revenue per available room (revpar) across the UK is forecast for 2010 by PricewaterhouseCoopers (PwC).

Despite a decline in revpar of almost 10% in 2009, PwC expects the 3% growth this year will rise to 5% in 2011. The figures are based on an expected 1.8% rise in average room rate and a 1.3% occupancy increase this year.

“Visibility is limited but reports of higher levels of transient visitors, more group conference bookings and a return of the business traveller (albeit slow) are all positive, especially for London,” said Robert Milburn, UK hospitality and leisure leader at PwC.

“Growth of the UK hotel industry reflects the capital’s resilience to the recession.  We think the worst is over and London looks set to build on its flourish in late 2009.”

London has now seen five consecutive months of occupancy growth from September 2009 to January 2010, with occupancy in the final quarter of 2009 reaching 82.5%, a record Q4 high.

Across 2010, London should see revpar increase by 5.8%, with a further 7.8% rise forecast for 2011.

In the regions, however, hoteliers are experiencing similar lows to those seen in 1991-92 when the UK came out of the ERM and interest rates hit 15%.

“Occupancies should start to stabilise in early 2010 following 11 quarters of decline and room rate are forecast to start recovering from Q2 this year,” said Liz Hall, head of hotels research at PwC.

Overall the regions could see 1.6% revpar growth in 2010 with a more solid recovery of 3.1% in 2011.

Profitability forecast to rise in London – but regions will have to wait until 2011 >>

UK hotels have seen the worst of the recession, says report >>

Revpar boost brings optimistic start to new decade for London hotels >>

By Janet Harmer

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